Amazon looks to cut fleet due to falling demand

Amazon is likely to reduce its fleet as cargo demand falls, according to Air Transport Services Group (ATSG).

Releasing its outlook guidance, ATSG says it will continue to lease 4 of the 12 Boeing 767-200s it leases to Amazon, with leases of the other 8 expiring between May and September.

ATSG’s subsidiary, Cargo Aircraft Management (CAM) expects to retire at least 3 of the 8 767-200s due to airframe limitations and utilise the engines to support other 767-200s.

CAM expects to re-lease and/or sell the other 5 767-200s which Amazon is not expected to continue using.

ATSG says its principal customers of DHL and Amazon will reduce their schedules and operate fewer block hours per aircraft across the US as they reduce ground and air distribution and fulfilment networks due to lower economic growth and consumer spending.

In its guidance, ATSG says CAM will complete passenger-to-freighter conversions and deliver 14 767-300s this year with another 16 to follow in 2024.

At least 6 Airbus A321-200s will be converted and delivered in 2023 with a similar number next year, subject to regulatory review by the European Union Aviation Safety Agency.

Conversions of what is expected to be leased fleet of 30 Airbus A330-300s will start this year, with CAM expecting to start leasing them from 2024 to 2028.

Rich Corrado, President and CEO of ATSG, says, “Demand to lease the newly converted freighter types we offer remains as strong as ever. The entry into new Airbus platforms along with the significant increase in leasing deliveries will increase our capital expenditures above 2022 levels. But clearly, 2023 will be a transition year for us, due to both a changing mix of leased freighters in service, and changes in flight schedules from customers of our US airlines.”